Landlord’s liability to meter their buildings is heating up

The Heat Network [Metering and Billing] Regulations 2014 came into force in December of last year. Their overall purpose is to reduce the amount of energy individuals and business use thereby reducing costs and the amount of energy consumed across the country. The way they do this is by requiring heat suppliers (those that supply and charge for heat, cooling or hot water to an end user) to provide information to the National Measurement Office (NMO) regarding their heat network. Clearly, the definition of heat supplier will cover landlords who provide communal heating and this information must be submitted to the NMO before 31 December 2015 and from then on, at least every four years. The two main issues tackled by the Regulations relate to billing and meters.

Billing

From 19 December 2014, there is an obligation on landlords relating to actual use billing. This aims to enhance awareness and transparency by requiring heat suppliers to bill based on actual consumption where meters or heat cost allocators are installed. This requirement need only be met where the cost of providing such detailed bills would not exceed £70 per annum per end user. Bills should contain current energy prices, details of total consumption (compared to the previous year if possible) and general information on how to improve energy efficiency.

There is a duty to bill on actual meter readings even if final customer point meters are not installed (as a result of a feasibility study on retrofitting to existing unmetered schemes), in this case it is the bulk meter readings that should be used.

Meters

There are 2 variations of meter installation requirements that come into force on 31 December 2016.

1.    The installation of meters is to measure the use of heating, cooling or hot water by each end user/final customer. The meters must be installed only if it is cost effective and technically feasible to do so.

2.    If it is not cost effective or technically feasible to install meters – If the heat supplier supplies both heating and hot water, they would have to install heat cost allocators, thermostatic radiator valves at each radiator and a hot water meter. Again, this is only required if it is cost effective and technically feasible to do so.

Cost effectiveness in terms of the Regulations is where the projected energy savings to the final customer over the 10 year period subsequent to installation, is greater than the estimated reasonable costs of installing the meters.

The meters must accurately measure, memorise and display the consumption of hot water by each end user. If meters are installed, temperature control devices must also be installed to enable the control of consumption by the tenant but only for heating and cooling – not hot water.

It should be noted for the further that the Regulations require the installation of meters when an existing meter is replaced, a new connection is made in a new building or a building undergoes a major renovation.

These Regulations have not been very well publicised but their impact on landlords could be significant. Those that, on determining that it would be cost effective and feasible to install meters, fail to do so, could be found criminally liable and fined.
 
By Harry Partridge, Trainee Solicitor